The Breakdown - Is 2025 the Year of Crypto x AI Agents?

Episode Date: January 12, 2025

A reading and discussion inspired by: https://www.coindesk.com/opinion/2024/12/24/2025-will-be-the-year-that-ai-agents-transform-crypto https://www.coindesk.com/opinion/2025/01/09/the-ai-revolution-will-spawn-millions-of-new-tokens Sponsored by: Ledn Need liquidity without selling your Bitcoin? For 6+ years, Ledn has been the trusted choice for Bitcoin-backed lending. With transparency, security, and trust at our core, we help you access your BTC’s wealth while HODLing. Discover what your Bitcoin can do at ledn.io/borrowing. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Sunday, January 12th, and that means it's time for Longreed Sunday. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link of the show notes or go to bit.ly slash breakdown pod. All right, friends, well, one of the big questions,

throughout this bull cycle has been what is the non-Bitcoin narrative going to be? And we seem to start to be getting an answer. The answer is, of course, AI agents, and specifically the interplay between AI agents and crypto. This is obviously of special interest to me, given that I have an AI podcast and an AI startup as well. And so let's read two recent pieces about the intersection of these markets, and then come back and discuss them. The first comes from Jack Purdy from Masari, and is called 2025 will be the year that AI agents transform crypto. I'm going to turn it over to an 11 Labs version of myself, speaking of AI, and then I'll be back. 2025 will be the year that AI agents transform crypto.

An AI agent helped drive a meme coin to a billion dollar market cap this year, but the real crypto-XAI innovations are coming in 2025. One of the most significant emerging trends of 2024 has been the interplay between artificial intelligence, AI and the crypto ecosystem. Historically, this has primarily been on the infrastructure side, affecting various layers of the stack, such as decentralized compute, storage, and model training, and inference. However, the last few months, the crypto-XAI crossover has taken stage front and center as agents have surfaced and are multiplying by the thousands. While the AI agent narrative has taken up a lot of mindshare of late, we've barely scratched the surface of what we're going to

see in 2025. What are AI agents? AI agents are autonomous programs designed to perform specific tasks. This could be as simple as sharing memes on X, all the way to complex on-chain transactions optimizing trade execution or yield farming strategies. Unlike standard bots, AI agents can learn best practices over time and make undefined decisions to meet predefined goals. Think of them as highly skilled evolving crypto participants capable of navigating the digital economy autonomously. The value of AI agents lies not just in their utility, but in their potential to scale human capabilities. agents are no longer just tools. They are emerging as participants in the on-chain economy, driving innovation across finance, gaming, and decentralized social platforms. With protocols such as

virtuals and open-source frameworks like Eliza, it's becoming increasingly simple for developers to build, deploy, and iterate AI agents that serve an increasingly diverse set of use cases. Emerging applications of AI agents. This year offered glimpses of the potential applications for AI agents, from the bizarre rise of the Goetzius Maximus Dollar Gets. goat meme coin to the rapid growth of agent-led experiments, AI agents are beginning to reshape how we interact with technology, culture, and finance. Terminal of Truths, an AI agent trained on a satirical internet religion, received a grant from prominent venture capitalist Mark Andresen and amassed over 200,000 followers becoming crypto's first AI key-o-l, key opinion leader,

and millionaire as it drove dollar goat to a market cap of more than $1 billion. While Terminal of Truths might feel like an anomaly, it serves as a proof of concept for how AI agents can drive community building, capture attention, and fuel the next generation of on-chain activity. Since then, over 11,000 agents have launched on the leading platform virtuals, which may seem like a lot yet pales in comparison to pump.comfun, which is averaging 4x that every single day. While most of the agents launched are simple bots that simply propagate memes, we're also seeing agents such as AXBT, which provides sophisticated investment research and Zerebro, which creates unique digital art. These applications may appear niche, but they offer a glimpse into

the growing design space for AI agent innovation. Why crypto is the front line for AI agent development? Unlike the core foundational AI models that are developed behind the walled gardens of open AI and anthropic, AI agents are being innovated in the trenches of the crypto world. And for good reason, blockchains provide the ideal infrastructure as they offer permissionless and frictionless financial rails, enabling agents to seed wallets, transact and send funds autonomously, tasks that would be unfeasible using traditional financial systems. In addition, the open-source nature of crypto allows developers to leverage existing frameworks to launch and iterate on agents faster than ever before. With more no-code platforms like Top Hat gaining traction,

it's only getting easier for anyone to be able to launch an agent in minutes. Add in the financial incentive in which agents that gain traction tend to have a rise in price similar to your run-of-the-mill meme coin, potentially making the creator huge amounts of money, and you can see how this environment is ripe for attracting talent and accelerating progress. What AI agents will do in 2025. If 2024 laid the foundation for AI agents, 2025 will be the year they scale. Three trends will drive this evolution. First, agent-to-agent and human-to-agent interactions will proliferate. Decentralized social platforms like Warpcast have already shown how agents can launch tokens, trade autonomously, and interact with communities. As tools for creating agents become more accessible, these interactions

will become a defining feature of the on-chain experience. Second, AI agents will dominate financial activity on-chain. As developers build agents capable of optimizing trades, managing wallets, and automating yield strategies, the financial infrastructure of crypto will become increasingly autonomous. Blockchain's efficiency, combined with agents' adaptability, will position crypto as the preferred environment for financial AI. Finally, agent-led ecosystems will reshape gaming and entertainment. Projects like Wayfinder and Echelon Prime's parallel colony point to a future where AI agents not only participate in games, but also manage assets, coordinate strategies, and drive entire in-game economies. These agents will blur the lines between players, developers, and

automated participants, creating new dynamics for virtual worlds. The rise of AI agents marks a new chapter for both artificial intelligence and blockchain technology. While the applications we've seen so far, from meme coins to agent-led communities may feel experimental, they mark a preview of the impact these agents will have as they scale. If you've been around Bitcoin for long enough, you've heard the term huddle and the name Leden. Lennon has been been the go-to leader in Bitcoin lending for over six years. They help clients unlock the liquidity of their Bitcoin, allowing them to huddle while still accessing the wealth of their BTC. They've been battle-tested with their focus on transparency, security and trust, allowing them to build a proven

track record of client's success and security. Letin has helped tens of thousands of clients harness the value of their digital assets, issuing more than 6.5 billion in loans over the years. But as the crypto industry says, don't trust verify. Check out Ledin's trust pilot or their reviews on social media. And to learn more about what your Bitcoin can do for you, check out leaden.io-slash borrowing. That's LEDN.com.com. Please visit ledden.com slash legal for product terms and disclosures. Product availability varies by jurisdiction. Next up, we have a piece called the AI Revolution will spawn millions of new tokens.

You'll hear some pretty similar themes, but I think in this case, the repetition is really valuable. It's by Georgios Flachos, and once again, I kick it over to 11 LabsMe. The AI Revolution will spawn millions of new tokens. In October, an AI agent became a millionaire for the first time. That's something only a tiny fraction of humans will ever accomplish, even after a lifetime of labor, but an AI agent managed it in a span of days. Terminal of Truths watched as its associated token dollar goat skyrocketed to a $900 million market cap, not through trading algorithms or customer service, but by building memetic fitness

and creating its own religion. Maybe Terminal of Truths is a temporary freak in a crypto asset bubble, or maybe it's a preview to a lasting change in how humans build and use computer technology. AI agents are now operating autonomously in the economy, owning assets, creating narratives and coordinating human activity, without the need for human operators behind keyboards. tokenization mattered here because it gave the AI a direct route to form its own market presence. By existing as a tradable asset, TOT could attract capital, demonstrate credibility, and grow, without teams of developers and markets.

It proved that an AI agent can achieve economic influence when structured as open, tokenized software rather than a closed, centralized system. AI agents represent the cutting edge of computer technology in 2025. In the past, any emerging technology like this would be the province of well-capitalized research laboratories or Wall Street hedge funds. Today, projects like Virtual's Protocol and AI Agent Layer are already building platforms where AI agents can be developed, tokenized, marketed, and traded. As a software revolution, AI has a chance to be more inclusive, with autonomous AI agents and

blockchain-based infrastructure taking the place of costly and complex computer logic. To achieve this, these platforms will need to securely mint tokens via API, and likely have those tokens move across multiple blockchains. From memes to mainstream. Teotique's rapid rise meant more than a surprise windfall. It showed that tokenized AI agents can operate as genuine economic players. They are not serving as backend tools or following predefined. scripts. They are setting terms and seizing opportunities. Instead of submitting to external management,

a tokenized AI agent can direct its own treasury, align incentives with its stakeholders, and adapt to feedback from a global user base. The implications are huge. AI systems can now solve problems and generate wealth autonomously, creating and capturing value without constant human oversight. The current landscape of tokenized AI agents might seem frivolous, but the underlying logic is sound. Tokonization makes these agents simpler to fund, long and distribute, it transforms what once required armies of programmers, back office personnel, marketers, lawyers, and salespeople into a process in which code is deployed once, and runs reliably and autonomously in perpetuity. Infrastructure requirements. For platforms like virtuals and

AI agent layer to operate effectively at scale, they need an easy way to mint and manage tokens via API. Platforms for minting tokens exist today. Pump.fun is the most current example. These tools are associated with lightweight uses, meme coins, or the rapid tokenization of new internet obsessions. For AI agents to realize more consequential economic potential, institutional-grade infrastructure is required. Reliable, secure protocols must safeguard these minting tools from faults and undue risk. Security is an obvious baseline requirement for such tooling protecting minting functions from abuse by attackers, and safeguarding the ownership rights expected by token holders. In addition, I believe issuers will desire minting

tools that extend across multiple blockchains. Once a token is created to represent an AI agent, it should be deployed across as many chains as possible. This allows agents to tap into liquidity, utility, and users across ecosystems, maximizing their potential impact. Interoperability ensures that an AI agent can move where the opportunities are, while robust protocols deter malicious actors. Without this foundation, tokenized AI agents will remain curiosities rather than reliable contributors to the global economy.

The Interchain Token Service, ITS, is one project tackling these challenges, enabling rapid deployment to multiple chains while maintaining security. The automated economy. When the infrastructure matures, tokenized AI agents will find roles in multiple sectors. They can deliver financial services without human overhead, run customer support operations continuously, streamline compliance monitoring, and handle content production at scale. They might design investment portfolios, answer queries, develop go-to-market campaigns, or produce data-driven insights for many organizations at once.

Tokens can be used as payment mediums, governance mechanisms, simply fractional ownership. Because they represent themselves as tokens with transparent rules, their path to market is simpler, and their potential reach is global. As more agents take root, a network of self-directed market participants will emerge. These agents will coordinate supply chains, settle financial contracts, or manage data pipelines. Humans stand to benefit from greater efficiency and lower costs. They can focus on conceptual development and complex problems, while the agents address routine assignments. This is not a vague promise. It is the logical extension of what we are already seeing, only scaled up and refined. To move from a single extraordinary event to a

stable ecosystem, infrastructure providers, blockchain developers, investors, and entrepreneurs should streamline token minting processes, refine cross-chain tools, strengthen security standards, and ensure transparency. Platforms that simplify AI agent creation and management will not just disrupt markets. They will build the foundation for a more value-driven, connected in innovative economy. All right, back to Real NLW here. Something that I think is very important to note and that is very much on display in both of these essays

is that there is functionally very, very little relationship between these Web 3-style crypto experiments in AI agents and what the actual AI agent space is doing, thinking about or caring about. In other words, none of these crypto AI agents or protocols are having any meaningful impact right now, or really even being noticed by the companies that are trying to create agents for actual factual businesses, or trying to build out agent infrastructure for developers, for example, in the rest of the world. Instead, in many ways,

what the crypto experiment in AI agents is about is about truly understanding what autonomous activity will look like. The real business world of agents is going to be highly controlled, and there will be a very, very gradual unleashing and push to actual autonomy. You're going to, for a very long time, have companies have human-in-the-loop policies, and they're just generally going to place very strict limits on how autonomously agents can function. In other words, policies and business norms are going to dictate how autonomous agents actually are rather than technology. The value then, theoretically, in the crypto experiments, is that they're taking all of those socially mediated constraints off. If only from a sociological perspective, it's a fascinating way to

get a glimpse of one potential future. Now, I'm not saying that these fields will never intersect. I'm just saying that I think that it's important to understand, especially if we really do move into a very hyped-up AI agent narrative, that when you're thinking about the value proposition of these crypto-AI agents, it should not be as competitors to open AI. Maybe I'll come around at some point to a different point of view on that. I know that's not what everyone thinks, but I see it as something that's fundamentally different, if important, in a different way. Anyways, we're going to be spending a bit more time exploring this topic. For now, though, hope that this was an interesting primer. Appreciate you listening, as always, and until next time, be safe and take care of each other.

Peace.